Sex Maybe Going Bankrupt

Sex Maybe Going Bankrupt

Woodland : CA : USA | Mar 30, 2010 at 6:23 PM PDT
Views: Pending
Bankruptcy Questions : Can I File for Bankruptcy for Free?

As a point of clarification, that is

With creditors swirling around the owner of an infamous website name, a California Federal Bankruptcy court must get its papers soiled as it attempts to determine whether or not a New Jersey lender can dismiss a bankruptcy action in order to pursue claimed assets.

The lender, DOM Partners LLC, a New Jersey concern, says it’s owed more than $4 million by Escom LLC, a California limited liability company for providing capital in order to develop an adult website’s operation. The bankruptcy suit was filed Friday, March 26, 2010.

DOM contends that it could best recover the outstanding debt by auctioning off what some consider the world’s most valuable domain name. An auction scheduled in New York City, New York on March 18, had been enjoined by three of Escom’s other creditors, who contend that they are owed more than $10 million for the same thing. Those three creditors initiated an involuntary bankruptcy against the website owner who resides in California.

According to DOM’s motion to dismiss the bankruptcy, “scores of potential bidders” have contacted them and are ready to pay, including both domestic and international concerns.

Escom acquired the domain name in 2006 for a $14 million price tag. According to court filings, DOM contends that Escom did not have the knowledge, wherewithal or skill to achieve its suggested intentions. In addition, all the lenders claim that Escom has not communicated nor provided adequate oversight of its books, plans or product in the last four years.

"ESCOM has no working capital of its own to finance any development of the Domain Name, let alone to pay its secured creditors," a representative for the lender said in court papers.

According to DOM, the only reasonable solution is to sale the domain name by auction. The value of that specific domain name has had all the investors at each others throats since the beginning of the enterprise.

"The other investors interfered and blocked us, threatened us and caused us various troubles and losses. We had our hands tied, and our money stolen," Mike Mann, the controller of the three other investors, said. "These people (DOM) were trying to fire sale it illegally after they did all these other things, so I couldn't allow that to happen."

According to Mann – who appears to head Escom - believes the site is worth about $50 million and that he had gotten involved with the website in hopes that the website would make $100 million so he could give 100 percent of the proceeds to charity.

"It's the best domain in the world by far," Mann said. "Sex is the most popular topic in the world. Dot-com will never go away, sex will never go away, everybody in the world knows how to spell this world ... and there's an enormous community of people that have a special interest in this."

The U.S. Bankruptcy Court in Woodland Hills, California has set a hearing on April 20 to hear DOM’s motion for dismissal.

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Nathaniel Hines is based in Florianópolis, Santa Catarina, Brazil, and is an Anchor on Allvoices.
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